If you are unsure of what ‘amortization’ means, or what a ‘Debt Coverage Ratio’ is, you are not alone. When you are negotiating your mortgage or looking for the right investment opportunity, our mortgage glossary can help you understand the basic terminology used throughout the mortgage process. 

*Source - the Canadian Association of Accredited Mortgage Professionals’ (CAAMP) online dictionary.

Agreement to Purchase and Sale
A written agreement between vendor and purchaser in which the purchaser agrees to buy a certain real estate property and the vendor agrees to sell upon terms and conditions as set forth in that agreement.
Amortization
Term used to describe the time over which the mortgage is to be paid, assuming equal payments. The life of a loan, e.g. a mortgage with a 25-year amortization period means that if all regular payments were made on time and the terms (payment, interest rate) remained the same, it would take 25 years to reduce the balance to 0.
Appraiser
An appraiser determines the market value of a house based on its condition and the selling price of comparable houses recently sold in the area.
Assumption of Mortgage
The act of assuming liability for an existing mortgage on a property by the purchaser of that property. With builders’ loans, the assumption is usually evidenced by written agreement.
Closing Date
The date on which the sale becomes final, the new owner takes possession of the property, and funds are transferred from the purchaser to the vendor.
Commitment
A letter / document issued by a lender reciting the basic terms of a loan which when accepted by the borrower forms a binding contract.
Conveyance
The transfer of an interest in property from one person to another.
Debt Coverage Ratio
The percentage of the borrower’s income used for monthly payments of principal, interest, taxes, heating costs and condo fees (if applicable).
Home Inspection
A visual inspection of the major components of a home, by a qualified individual, giving the homebuyer a true and unbiased picture of the home’s condition.
Interest Adjustment Date
The date one month prior to commencement of amortization when accrued interest computed on the moneys advanced becomes due.
Interest Rate
Interest Rate is the percentage charged on outstanding loan balances.
Interim Financing (Construction Financing)
Interim loans are used to provide construction financing until the permanent loan can be funded.
Maturity Date
The final day of the term of the mortgage.
Mortgage
Any charge on real property as security for a loan.
Mortgage Insurance
Required if you are contributing between 5 percent and 20 percent of the value of the property as the down payment.
Mortgage Term
The length of time the interest rate is guaranteed for a mortgage. Mortgage terms normally range from 6 months to 5 years or more, after which time you can repay the balance of the principal owing or re-negotiate the mortgage at current rates.
Mortgagee
The lender
Mortgagor
The borrower
Pre-Authorized Cheques
Direct withdrawals of due payments from a borrower’s bank account in accordance with authority granted by the borrower.
Prepayment Clause
A clause inserted in a mortgage that gives the mortgagor the privilege of paying all or part of the mortgage debt in advance of the maturity date.
Prepayment Penalty
The sum of money (usually equal to an amount of interest) a mortgagee may require from a mortgagor to repay all or part of any outstanding principal.
Prime Rate
The rate at which financial institutions lend to their best customers.
Second Mortgage
A mortgage placed on real property which is already encumbered with one mortgage. Determination of first, second, third mortgage is by priority or registration (time and date).
Survey
A property survey is a process by which land boundaries and areas are determined and defined and improvements may be plotted thereon. Surveys are also used for locating and identifying property lines, improvements on the land and easements on the land.
Surveyor’s Certificate
A formal statement signed, certified, and dated by a surveyor giving the pertinent facts about a particular property and any easements or encroachments affecting it.
Term
In a mortgage, term is the actual length of time for which the money is loaned.
Title
The means of evidence by which the owner of land has lawful ownership thereof.
Title Insurance Policy
A contract by which the insurer, usually a title insurance company, agrees to pay the insured a specific amount for any loss caused by defects of title to real estate, wherein the insured has an interest as purchaser, mortgagee or otherwise.
Total Debt Service Ratio (Single Family)
The ratio of an amount equal to the annual mortgage charges and acceptable installment account payments to an amount equal to the effective gross annual income of the borrower.

Current Rates

as of November 20th, 2017

2.641 Year
2.542 Year
2.843 Year
2.994 Year
2.975 Year
3.447 Year
4.0910 Year
2.29ARM/Variable
3.70HELOC
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